Sirius XM boosts full-year guidance
Adds 583,000 subscribers in second quarterSirius XM Radio is adding subscribers at a healthy clip despite a dreary economy for new cars.
The nation's only satellite radio company said Wednesday it added 583,000 subscribers in the second quarter, an astounding accomplishment when compared with the same quarter a year ago, when subscriber ranks fell 186,000.
In the first half of the year, Sirius XM added 755,000 subs and in the past 12 months added 1.1 million. As of the end of the second quarter, Sirius XM boasted a record 19.5 million subs.
Sirius XM also raised its guidance, predicting that it will add a total of 1.1 million subscribers in 2010.
The strong results caught some analysts by surprise because they had assumed slow sales of new cars, most which now carry satellite radio as a standard feature, portended slow or no growth for Sirius XM. The trade paper Automotive News says new car sales fell from 11.8 million in May to 11.3 million in June.
The fact that Sirius XM is stepping up guidance despite a June falloff in auto sales, said Lazard Capital Markets analyst Barton Crockett, "suggests that core consumer demand for the service is more robust than we had expected."
Indeed, Sirius XM also said that the percentage of users who choose to pay for their service once their free trial period ends improved to 47% from 44% a year ago.
Investors cheered the Sirius XM announcement by bidding shares 6% higher Wednesday to $1.